With South Korea going to the polls on Tuesday, it’s clear that the race guarantees a win for crypto regardless of who becomes the president. Both leading candidates, Lee Jae-myung and Kim Moon-soo, have made crypto a central part of their campaigns.
Lee, who narrowly lost the 2022 presidential race, has proposed legalizing spot crypto exchange-traded funds and even allowing the nation’s $884 billion pension fund to invest in crypto. The ETF push is backed by his conservative rival, suggesting rare bipartisan alignment on the potential digital-asset policy.
His opponent, Kim Moon-soo from the conservative People Power Party, has also voiced support for the digital asset industry. Kim has vowed to remove barriers so banks can work with crypto exchanges. He also advocates lowering taxes for small investors and entrepreneurs profiting from their crypto.
Such bipartisan agreement is uncommon in South Korean politics. But it speaks to the increasing power of crypto in the country. With over 18 million people, over a third of the population, who engage in digital asset trading, it is clear that crypto is now a serious political force.
South Korean regulators tighten crypto rules to protect investors
The South Korean crypto scene has seen both highs and lows. The greatest blow arrived in 2022 when the TerraUSD stablecoin project imploded. Led by South Korean developer Do Kwon, the failure wiped out more than $40 billion in value, devastating retail investors and fueling a public outcry.
In retaliation, the Virtual Asset User Identity Protection Act was passed and came into force in July 2024 with razing provisions for crypto exchanges. Under the law, operators are required to hold at least 80% of user deposits in offline cold wallets, maintain insurance, and develop a plan for possible hacks or system crashes. Exchanges themselves are also subject to tough penalties for fraud, with executives facing life sentences.
Meanwhile, regulators are preparing new rules to oversee the stablecoin market, driven by concerns over capital flight through foreign-pegged assets like USDT and USDC. South Korea’s exchanges had outflows of 56.81 trillion won in the first three months of 2025, almost half of which were in dollar-backed stablecoins.
Lee Jae-Myung suggested launching a won-backed stablecoin. He said it could modernize South Korea’s financial system and help keep money from leaving the country. But the idea is encountering pushback. The central bank says that only regulated institutions — not private companies — should be able to issue stablecoins pegged to the won.
South Korea expands crypto opportunities
South Korea is already one of the world’s most active crypto markets. On some days, trading at local crypto exchanges exceeds that on the country’s main stock indices, Kospi and Kosdaq. The trend underscores the high profile of digital assets, especially for young investors who believe they are being left behind by traditional finance.
The backing of both presidential candidates has renewed optimism in the industry, drawing the attention of venture capitalists, startups, and blockchain developers. Simon Seojoon Kim, chief executive of Seoul-based Hashed Ventures, said that since all major candidates support pro-crypto policies, crypto investors in South Korea are set to benefit regardless of who wins the election.
The global backdrop is also giving momentum. Recently, the President of the United States, Donald Trump, signed an executive order to promote cryptocurrencies as dollar-backed stablecoins, Terming it as a mechanism handy to uphold the US financial System. That’s prompted Asian lawmakers, including those in South Korea, to move fast so they don’t get left behind.
In selecting pro-crypto leadership, irrespective of party, South Koreans are sending the message: The future of finance is digital. And the country is poised to lead.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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